Berkeley Capital Corp. II
TSX VENTURE : BIZ.P

April 22, 2009 08:30 ET

Berkeley Capital Corp. II Announces Proposed Qualifying Transaction With Med BioGene Inc.

TORONTO, ONTARIO--(Marketwire - April 22, 2009) - Berkeley Capital Corp. II ("Berkeley"), a capital pool company listed on the TSX Venture Exchange Inc. ("TSX Venture Exchange") (TSX VENTURE:BIZ.P), announces that it has entered into an agreement on April 21, 2009 with Med BioGene Inc. (TSX VENTURE:MBI) ("Med BioGene") to complete its Qualifying Transaction. The Qualifying Transaction is not a Non Arm's Length Qualifying Transaction in accordance with the policies of the TSX Venture Exchange.

The letter agreement provides that Berkeley will participate in a private placement by Med BioGene (the "Private Placement") pursuant to which Berkeley will subscribe for approximately $650,000 of units of Med BioGene (the "Med BioGene Units"). Berkeley will invest all of its available cash reserves in the Private Placement, and, in exchange, Med BioGene has agreed to satisfy Berkeley's outstanding payables and its expenses related to the announcement and approval of Berkeley's participation in the Private Placement and its subsequent dissolution.

Completion of the proposed Qualifying Transaction is subject to, among other things, regulatory approval and shareholder approval of Berkeley, and the closing of the Private Placement in the minimum amount of $1,300,000, as described below.

Med BioGene will sell and issue a minimum of $1,300,000 and a maximum of $1,600,000 of Med BioGene Units in the Private Placement. Each Med BioGene Unit will be issued at a purchase price of $0.08 and will be comprised of one Med BioGene common share and one-half of one non-transferable warrant. Each whole warrant is exercisable into one additional Med BioGene common share at an exercise price of $0.10 for a period of 24 months, except that Med BioGene may elect to accelerate the expiration of the warrants if the closing price of Med BioGene's common shares on the TSX Venture Exchange is greater than $0.30 for 20 or more consecutive trading days.

Med BioGene will use the proceeds of the Private Placement for the development and commercialization of LungExpress Dx™ and for general corporate purposes.

Following the closing of Berkeley's purchase of the Med BioGene Units in the Private Placement, Berkeley will undertake the necessary steps to allow it to distribute (the "Distribution") the underlying Med BioGene common shares and warrants pro rata to the Berkeley shareholders and thereafter to be delisted from the TSX Venture Exchange and dissolved (the "Dissolution"). Any Med BioGene common shares and warrants distributed to Berkeley shareholders who are currently holding their Berkeley shares in escrow will be held in escrow under the same terms, subject to any amendment of the escrow approved by the TSX Venture Exchange and the Berkeley shareholders. All securities underlying the Med BioGene Units distributed to the Berkeley shareholders will be subject to a statutory four month hold period from the date of issuance.

Completion of the proposed Qualifying Transaction is subject to, among other things, approval of the TSX Venture Exchange, shareholder approval of Berkeley, including the majority of the minority in accordance with the policies of the TSX Venture Exchange, and the closing of the Private Placement in the minimum amount of $1,300,000. There can be no assurance that the Qualifying Transaction will be completed as proposed or at all.

Berkeley and Med BioGene anticipate that Berkeley's purchase of Med BioGene Units will occur at a closing on or around May 29, 2009, after which Berkeley will commence the Distribution and the Dissolution.

Berkeley has engaged Bloom Burton & Co., a Toronto-based leading healthcare boutique investment bank, to provide a report to the board of directors of Berkeley relating to Med BioGene and the Private Placement.

About Med BioGene Inc.

Med BioGene is a life science company focused on the development and commercialization of genomic-based clinical laboratory diagnostic tests.

Med BioGene's lead product under development is LungExpress Dx™, a test for early-stage non-small-cell lung cancer that analyzes the molecular profile of a patient's tumour to provide information to assist in tailoring treatment for that specific patient. LungExpress Dx™ is the first and only gene expression-based test for non-small-cell lung cancer shown to assist in determining a patient's benefit from chemotherapy and prognosis for survival.

Further information about Med BioGene can be found online at www.sedar.com and Med BioGene's website at www.medbiogene.com.

As at the date of this press release, the outstanding securities of Med BioGene consisted of (i) 41,292,495 common shares, (ii) options to purchase an aggregate of 7,342,500 common shares, and (iii) warrants to purchase an aggregate of 14,955,814 common shares.

On the basis of the last filed unaudited financial statements for the three months ended September 30, 2008, Med BioGene had assets of $2,028,382, liabilities of $465,672, accumulated losses of $9,232,913, shareholders' equity of $1,562,710 and available working capital of $1,237,327. For the nine months ended September 30, 2008, Med BioGene recorded no revenue and a net loss of $1,785,063.

Directors and Officers of Berkeley and Med BioGene

There will be no change in the composition of the board of directors or in the officers of Berkeley as a result of the Qualifying Transaction.

In connection with the Private Placement, Med BioGene will appoint Kevin K. Rooney, a current director of Berkeley, as a director of Med BioGene.

Investor Considerations

Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the Qualifying Transaction and any offering document prepared in respect of the Private Placement, any information released or received with respect to the Qualifying Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

Cautionary Note Regarding Forward-looking Statements

This news release contains forward-looking statements (including, without limitation, information regarding the proposed Qualifying Transaction and the business opportunities and plans of Med BioGene) that involve risks and uncertainties that could cause the results of Berkeley and Med BioGene to differ materially from current expectations of their respective management. Actual results may differ materially due to a number of factors including, among others: the Qualifying Transaction may not close; Med BioGene may not be able to develop a commercially viable product; market acceptance of Med BioGene's products and services; the impact of competitive products and services; and costs of research and development. The matters discussed in this news release also involve risks and uncertainties described in documents filed from time to time by Berkeley and Med BioGene, respectively, with the Canadian securities regulatory authorities. Neither Berkeley nor Med BioGene assumes any obligation to update the forward-looking information contained in this new release, except as required by law.

LungExpress Dx™ is a trademark of Med BioGene Inc. Other names mentioned herein are the property of their respective owners.

The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy for this release.

Contact Information

  • Berkeley Capital Corp. II
    Kevin K. Rooney
    Director
    (415) 794-2472